Cloud drives SAP Q3 revenues

SAP cloud computing

SAP cloud computing

by SAVIOUS KWINIKA
JOHANNESBURG – SYSTEMS Applications Products (SAP), the enterprise software firm, delivered strong growth in the cloud and a solid overall revenue performance in the third quarter of the year.

With non-IFRS cloud subscriptions and support revenue increasing 41 percent (42 percent at constant currencies), SAP is the fastest growing enterprise cloud company at scale.

Non-IFRS software and software-related service revenue grew 7 percent (7 percent at constant currencies).

The negative effects from currency translation SAP experienced year-to-date dissipated in the third quarter and are expected to reverse in the fourth quarter 2014.

“We are accelerating our shift to the cloud with more than 40 percent revenue growth in the cloud. SAP is THE cloud company powered by SAP HANA helping customers run simple with over 44 million cloud users and the world’s largest business network.

“We are leading the next generation customer engagement with the triple digit growth of our omni-channel e-commerce platform,” said Bill McDermott of SAP.

He said the company’s portfolio depth in the cloud, global scale and industry domain expertise are the bedrocks that separate us in the marketplace.

With SAP HANA and the Business Network, SAP will continue to shape the future of the enterprise software industry.

“We achieved a solid overall topline performance in the quarter with 7% growth in non-IFRS software and software-related service revenue.

“Year-to-date non-IFRS software and software-related service revenue is up 8% at constant currencies – at the high end of our full-year outlook range. Non-IFRS earnings per share increased 8% in the quarter,” said Luka Mucic, CFO of SAP.

“Our order entry for new business in the cloud was more than one third of the software license revenue in the third quarter, up significantly from a year ago.

“With this powerful shift we are raising the cloud outlook again while adjusting the operating income range to reflect less upfront and more ratable revenue.”

SAP’s annual cloud revenue run rate now exceeds €1.3 billion or $1.7 billion.

Non-IFRS calculated cloud billings increased 51 percent (27 percent at constant currencies).

Non-IFRS deferred cloud subscriptions and support revenue was €498 million as of September 30, 2014, a year-over-year increase of 30 percent (22 percent at constant currencies).

SAP’s cloud applications total subscribers now exceed 44 million.

SAP had a solid performance in EMEA, despite uncertainties in the Ukraine and the Middle East.

Non-IFRS software and software-related service revenue increased 8 percent (8 percent at constant currencies) with a strong performance in Germany in both software and cloud subscriptions and support revenue.

Non-IFRS cloud subscriptions and support revenue in EMEA was a particular highlight, growing 59 percent (59 percent at constant currencies),  showing exceptional cloud traction in Europe.

The Americas region saw a mixed performance in Latin America. Similar to other companies in the industry SAP is seeing a more difficult macro and political environment in Latin America, in particular in Brazil and Argentina, combined with execution issues.

Non-IFRS software and software-related service revenue in the Americas increased 5 percent (5 percent at constant currencies).

Non-IFRS cloud subscriptions and support revenue grew by 34 percent (34 percent at constant currencies).

The Asia Pacific Japan (APJ) region had a strong performance with 10 percent growth in non-IFRS software and software-related service revenue (10 percent at constant currencies).

Non-IFRS cloud subscriptions and support revenue grew by 57 percent (56 percent at constant currencies).

SAP achieved a turnaround in its business in Japan with solid double-digit growth.

Based on the strong momentum in SAP’s cloud business, the Company is raising its cloud outlook again and now expects full year 2014 non-IFRS cloud subscriptions and support revenue to be in a range of €1,040 – €1,070 million (previously €1,000 – €1,050 million) at constant currencies (2013: €757 million).

With the customer-driven mix shift from upfront to cloud subscription revenue the Company now expects full-year 2014 non-IFRS operating profit to be in a range of €5.6 billion – €5.8 billion (previously €5.8 – €6.0 billion) at constant currencies (2013: €5.48 billion).

“SAP anticipates the fast-growing cloud business along with growth in support revenue will drive a higher proportion of more predictable revenue in the future,” SAP stated.

– CAJ News

 

 

 

 

 

Short URL: http://cajnewsafrica.com/?p=2119

Posted by on Oct 20 2014. Filed under Featured, Finance, Finance & Banking, Software, Technology. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

Poll

Who do you want to lead South Africa ?

Connect to CAJ News on Facebook

Subscribe to our Newsletter

Photo Gallery

Log in
All material © CAJ News Africa. Material may not be published or reproduced in any form without prior written permission.